Peering Behind the Financial-Aid Curtain

St. Louis—The way colleges decide which applicants to admit and how much financial-aid to offer them has long been mysterious to many families. The last few years have brought a student-loan scandal, a weak economy, and ever-growing worries about both getting into college and paying for it, so it’s no wonder families are interested in solving that mystery. But that doesn’t necessarily mean they’re on the right track.

“There’s so much misunderstanding of what we do in admissions and aid, but especially financial aid,” said Angel B. Perez, director of admission at Pitzer college, at a session of the National Association for College Admission Counseling’s annual meeting here on Saturday.

Mr. Perez told the audience that he recently gave a presentation to a group who see this confusion firsthand: college financial planners. They told him stories of families with lots of assets who apply for aid in the hope that the financial aid office will let the admission office know how wealthy they are, increasing admissions odds; and of middle-income families who were fearful that applying for financial-aid would hurt their son or daughter’s chances.

A big part of the problem, Mr. Perez and his co-presenters agreed, is that colleges don’t tell prospective families or counselors enough about how they distribute aid.

“I think most admissions officers, frankly, try to avoid or minimize talking about financial aid,” said Mary Hill, co-director of college counseling at St. Paul Academy and Summit School, in Minnesota.

Families may know the financial-aid lingo: need-blind, need-aware, meeting full need; but they are missing the larger point, said Matthew J. Malatesta, vice president for admissions, financial aid, and enrollment at Union College. All but the very wealthiest colleges have a financial-aid budget they must adhere to, he said, and the real question families should ask is how that budget is managed.

There are only so many ways to do this, Mr. Malatesta said. One is to have enough wealthy students that it isn’t a big concern. Another is to decide, whether a college considers financial need in admissions decisions or not, that it simply doesn’t have enough money to meet accepted students’ full need. The third is to consider need in admissions, at least at the margins, and then give every accepted student enough aid to meet their need.

Mr. Malatesta’s college takes the third approach. “I find the most surreal aspect of my job, I have a $33-million budget, and it’s never enough money,” he said.

In any of these scenarios, all the college is trying to do is use its resources to the best of its ability, Mr. Malatesta said. But: “When you talk about these things, there’s a certain ick factor to it.”

From the family’s perspective, once they know whether or not a college can meet a student’s need, the next question is how. At many colleges that do meet full need, work study and loans are part of the aid mix, so applicants should be prepared to ask how a college approaches using these forms of aid, Mr. Malatesta said.

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